The Importance of Diversity and Inclusion in Franchising in 2024

In 2024, diversity and inclusion (D&I) are no longer buzzwords — they are essential business strategies driving success across industries, particularly in franchising. As the franchise sector becomes more dynamic with diverse markets and consumer bases, integrating D&I practices is crucial for long-term growth, innovation and competitiveness. 

Creating a Welcoming Environment for All

Blushington, a beauty brand founded in 2011, transitioned from a corporate model to a franchise model in 2024. Natasha Cornstein, the company’s CEO, underscores the importance of inclusivity in creating a welcoming environment for customers of all ages, skin tones, and hair textures. 

“What sets Blushington apart is that our training focuses on delivering services for all,” said Cornstein. “It speaks to the ethos of us — we are female-founded and led — and we want to create opportunities for others. We realized we could grow by expanding through our franchise model. We fell in love with the thought that we could bring incredibly accomplished entrepreneurs from all over the country, and we were very excited.”

This commitment to inclusion goes beyond customers to encompass the franchisees and team members themselves. Cornstein emphasizes the importance of surrounding herself with diverse perspectives, which drives innovation and success. 

“I really believe in horizontal leadership,” said Cornstein. “It's not a top-down hierarchy — it's bottom-up and horizontal. Your greatest ideas will come from those on the floor. I try to sit at the reception desk and speak to customers, and understand what they’re feeling. When you bring your team in and are willing to be a power listener, engage your team and live that inclusivity, you will see your business soar.”

A Business Case for Diversity

The benefits of diversity extend beyond creating a positive culture. Arvind Rongala, CEO of Edstellar, emphasizes the tangible business benefits of diversity and inclusion in franchising. 

“Organizations that embrace diversity report improved employee satisfaction, increased customer loyalty, and better market reach,” said Rongala. The business case for D&I is clear: a diverse team fosters collaboration and innovation, which ultimately leads to higher employee engagement and stronger brand reputation.

Rongala also highlights the success of major franchise brands like McDonald’s and 7-Eleven, which have prioritized diversity in their corporate strategies. These companies have implemented diversity training programs and created support systems for diverse franchisees. For example, McDonald’s says it has seen significant improvements in employee engagement and performance due to its commitment to diversity, equity and inclusion (DEI) initiatives.

Implementing Effective Diversity Strategies

Franchisors looking to integrate D&I practices must be intentional about their strategies. Cornstein shares how Blushington prioritizes inclusivity at every touchpoint, explaining, “Every touchpoint speaks to our commitment to inclusivity.”

The company’s wig styling service, for instance, was born out of a conversation between a team member and a board advisor (the board is made up of all women), underscoring the importance of listening to employees from diverse backgrounds. 

“It is an example of being inclusive, both for customers and team members,” said Cornstein. “The genesis of these services — whether for religious, health or fashion reasons — started as a conversation between one of our artists in NYC and one of our advisory board members who was on a book tour promoting inclusive beauty and spotlighting diverse leaders in the industry. The artist styled a wig for the board member, and she came to me with the idea to create a service category out of it. I met with her weekly, and we developed the service together. This was an opportunity to mentor a young team member who wasn’t really in the business world.”

Rongala offers practical advice for franchisors: “Effective strategies for promoting diversity include inclusive recruitment practices, mentorship programs and comprehensive diversity training.” 

Edstellar, for example, works closely with franchise systems to address D&I challenges, providing data-driven tools and skilled personnel to manage these initiatives. Rongala notes that companies adopting these tools have seen significant improvements in employee engagement and productivity. For instance, one client reported a 25% increase in employee satisfaction and a 15% productivity boost within six months.

Overcoming Challenges to Foster Inclusion

Despite the obvious benefits, implementing D&I initiatives comes with challenges. “Common challenges include resistance to change, limited resources and a lack of understanding of DEI benefits,” said Rongala. 

Addressing these challenges requires strong leadership and ongoing education. Open communication is key to overcoming resistance, and demonstrating the positive impact of D&I on business performance can help franchises navigate these obstacles successfully.

Cornstein echoes this sentiment by urging leaders to be thoughtful in how they approach D&I within their organizations. 

“I would like any leader of a business to be thoughtful in what diversity and inclusion looks like — how are you communicating it, and what is actionable for you?” she said. “You have to really ensure that inclusion is part of your business. You have to set your goals and live by them. It's going to look different for every franchisor and business model.” 

Overall, diversity and inclusion are more than just ethical imperatives. By embracing these principles, franchisors and franchisees can build a business environment that reflects the communities they serve, attracting a loyal customer base while fostering an engaged and innovative workforce. 

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